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tv   Squawk Box  CNBC  March 6, 2015 6:00am-9:01am EST

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venice near the santa monica airport. it's friday march 6th 2015 and squawk box begins right now. >> live from new york where business never sleeps, this is squawk box. good morning everybody. happy friday. welcome to squawk box here on cnbc. i'm becky quick with joe kernen and andrew ross sorkin. he was supposed to be out today. >> i was supposed to be skiing. >> it's heartbreaking. >> we all had our hearts set on you not being here. me the viewers. >> i was worried when i saw the delta plane -- >> that wasn't the plane i was supposed to be on. >> not a day you want to be flying. >> see i thought you were out of going to a conference where you had to work. >> no i was going skiing. >> >> then i found out you were
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going to be doing something you liked and that eased the pain for me of you being here. >> you're such a kind soul. >> nothing is going to rain on my parade. it's a friday. it's a jobs friday and it's his birthday birthday. >> that's right. and he's going to be with us. >> he's not going to be in studio. i wish he was. we would need a lot of candles. but 89 baby. >> you're going to sing to him. happy birthday mr. chairman. you might need to do that right? only you can do that. >> he said some stuff recently. have you been reading the stuff he said? >> i read some last night. worst demand since the depression. euro no way it lasts. when you do get older you start saying things you really don't care quite as much about the
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repercussions. >> you speak the truth. >> you do. whose read is this anyway? >> it's mine. >> well what are you doing. >> it is jobs friday as you mentioned but it's also allen greenspan's birthday and national day of unplugging. it's time to put down your smartphone, your tablet your computer and all other electronics and enjoy life in the moment for a little bit. talk to a colleague and hug a friend. the organization behind the whole thing says you are allowed to use the internet to learn about the cause and post a photo of yourself with a sign pledging to do the movement. but not until after squawk box today. >> you're not allowed to recharge. the charge you already have can you use that up? it's not plugged in when it's charged. >> you're supposed to put it down the whole day. >> do you know who i asked to book today? michael wolf. did you see his piece yesterday?
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>> no this facebook and social media and whole digital world is like a wasteland. just a total wasteland. it's breaking bad. who hasn't seen breaking bad. that's where you're seeing the creativity. i don't know why it appealed to me. >> because you agree? >> i don't disagree with you. >> in the incredibles, the guy that's getting super powers he goes you know when everybody has super powers none of us are super. when everybody tweets and facebooks, it's just endless dribble. it's nothing. >> anyway making friends with our twitter followers. >> i am. let's get you updated on the stories we're watching this morning. the february employment report is due coming up at 8:30 eastern time. the economy likely added 240,000 jobs last month. the unemployment rate is seen
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dipping to 5.6%. we'll have a lot more on the market expectations of course in a couple of minutes and throughout the rest of the show. all 31 u.s. banks passing feds latest capital test. that's the good news but firms with with the largest trading books came out weak. now here's the reason. the regulators assumed a surge in corporate default in the hypothetical scenario. the fed will release the second stage of stress tests and we'll hear about that next week. san francisco fed president jon williams says the u.s. economy could be growing at closer to a 4% annual pace. the hold up is economic weakness abroad. so it's not here but he says it's driving up the value of the dollar and that's what he claims to be the biggest challenge. >> yeah we're always just about ready to have these great gdp numbers and there's always something. >> and we're not. >> jon williams harrison ford we could definitely do a lot. >> he's doing okay. >> he's doing okay. >> i know exactly where that is by the way. >> on that. >> crash landed on a golf
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course. >> but santa monica airport for years, there's been like 11 small planes -- it's weird the way the planes come in. you'll be around santa monica and is that thing too low and you realize it's going to the santa monica airport. >> he was in an old antique plane. >> i saw it. >> there were two seats but it's just him. he's always out there flying around. >> he has several planes and helicopters too. but he was the perfect guy for indiana jones. >> he's 72. there's life after -- in that late 40s to early -- you know there's life. life will go on. among today's stocks to watch, gap, the retailer posting a surprise drop in monthly sales. february comps declining 4%. and then telecom firm reporting quarterly earningings in line with estimates. the stocks getting a boost on
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upbeat current quarter revenue guidance and cooper company beat the street. shares rising on the news. one other thing i was thinking about, i was focussing on the stocks obviously but one thing that occurred to me was the 117-year-old person that had a birthday. >> i saw that. >> a woman in japan. >> and we wish her a happy birthday but he said life was short. even at 117 but i did the math i could theoretically be at the halfway point right now. >> sure. >> there's no reason to think i'm not and if you're an optimist. >> you have decades that they can still develop better and better science. >> not if he has his way. >> i think we'll be okay. >> good. >> let's tell you about apple. it's expected to unveil details of its new watch on a big event
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on monday. there's a doubling story ahead of today's wall street journal. it's the lead story. the mobile payment system is hit by a surge of transactions and it's low tech stuff. not high-tech. let's explain how this is happening. a criminal gets a credit card number. data stolen in recent data breaches at the retailers including home depot and target. that makes it able to use and buy a purchase without a physical credit card. it's a very low tech method but 80% of the purchases have been for items bought at apples own stores. >> that's kay si they're doing it at the stores though. >> that's high margin. it's pretty expensive high ticket items. >> and go to great lengths to say it's not a problem with apple pay itself. it's the info loaded on it but
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you don't need the card. >> >> it works good and happened more than a few times. >> did you see where they were using the card? >> no. >> at apple. because they resell better than anything else. >> i don't know how they'll fix that. >> i don't know. the cards are supposed to be better with the chips put into them. apple is going to need to find better ways to verify. >> it goes back to the issue of the credit card companies in the united states. not having a pen associated with the card. >> additional information. >> you know what, you see that chart right there, remember when it got up to 135, it was 780 billion and made the point no tree grows to the sky. maybe it will be a trillion dollar company obviously but
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it's weird, isn't it? >> 736 today. >> yeah 736 but in the nasdaq above 5,000 and apple at 800 billion at the same time. >> that's not a consequence. >> right but the nasdaq can't keep going up if apple doesn't go up. >> it's not a consequence. >> you wonder both of them are there and you just wonder. let's check on the markets this morning. the futures, so far ahead of the big jobs report down about 8 points. so far yesterday was not great for the stock market. . we're still above 18,000. it was all over the place yesterday. indicated down 8 but that could all change at 8:30. even greece is up. look at that. but sort of fractional moves in all the other markets. great story on the cover of the wall street journal we have so much oil we don't know he what to do with it in this country.
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we're 70 or 80% full. we need to build more storage facilities. we don't have a place to put the excess oil and we're looking at the asian markets. >> not just here but around the globe. >> then did you see -- i saw iron ore too based on what's happening in china. new lows in that area as well. what's the last thing we saw? we threw asia in there? . there's oil. $50.80. he makes interesting points about interest rates here that if the fed is going up and these rates continue to stay low it's indicating that maybe things aren't quite as great as we believe and maybe it has something to do with that. there we have it. 109. i don't know if we've seen that until today. that's probably an 11 year. >> that's more than that. >> yeah. it depends on which currency you measure it against.
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but 109 now on the euro and gold is below 1200 again. investors are ready. it says here for today's jobs report. i don't know that. whether they are or not but let's try to get them ready. let's give more on what to expect. here on set is michelle. i want to go with meyer because you run yahoo! you know all about the stock market and interest rates and you're deputy head of u.s. economics at bank of america global research. and i'm sure you heard jon williams, we don't need to play any music. we can if you want but we don't need to. you heard him say we'll be at 4%. in this case it's a weaker euro causing a stronger dollar. this is a 4% economy we're in right now. >> it was the problems out of
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washington, the fiscal cliff, uncertainty. the debt debacle. before that it was the european crisis escalating. the weather early hast year and might be the weather again now. there's always a reason but the underlying trend has been soft. the recent data looked better. there is momentum building in the economy. the jobs numbers in particular have been the strong point. so if you don't get a continuation of that in today's report then people will start to wonder of it. >> do you think we up ticked to -- 225 or 250 has been the average. we were at 200 for awhile. are we adding 225 to 250 every month? >> the moving average has been close to 250,000. the three month moving average is above 300,000. the recent data for jobs has been exceptionally strong and there's been a disconnect between what the labor market numbers are saying versus gdp. that might be why williams and others are arguing that the economy is stronger than what gdp is suggesting because
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they're consistent with closer to a 4% economy. >> you heard us talking about the nasdaq and we're also going to talk a little bit about technology today and whether there's evidence of a bubble. you saw that tech deal yesterday. you have private tech. that's what i think cuban was referring to. you saw the comments. suddenly mark cuban, he says something on closing bell and we have to run sound bites of it. >> the idea that it's worse -- >> but earlier this week we had a bunch of people saying that the private tech group was oversold. now it becomes news. >> he was very aggressive in how he said it. >> i think it's hard to say that technology is -- >> private. >> the tech sector is profitable today across the board and in 2000 companies selling for
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multiple sales with no hopes of profit. it's not in the same ballpark. he's wrong on that. >> how about bio tech. there's three different firms trying to buy that firm. >> yeah but ultimately if you look at the new drug discoveries they have been great so there's absolutely -- there's real growth there and people trying to snap it up so i think you're going to see -- if there's anything for sale it's going to get bit up. >> we saw the euro at 109. we're okay with that? with no one buying anything from us? >> i'll tell you what the market is telling you is there's no way that the fed can keep moving interest rates higher. >> what do you mean keep? >> that's true but the expectations are at the end of 17 they don't get the 2% fed funds. so everybody is focussing to start in june or start in september. if they get to 175 three years from now our stocks will be well supported. >> is there anyway this is a bad
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number today? that's the first data point that gets the fed -- what month is it? it feels like april fools, andrew. i thought you were out and i was like april fools but it's not. it's march -- >> 6th today, right. >> could you get enough data point where is the fed chickens out? >> sure. the labor market has been really strong. you always look to the weather when there's some sort of miss but there has been abnormally poor weather conditions in february and it comes after a period of january and december where the weather is a lot better. so the seasonal factors can be messed up. there's a lot of noise in the data. >> you seem to think they are good. >> it's better. it's improving. from the fed's perspective if you get a weak number in february and if jobs report and gdp is tracking low 2% for q-1
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even if there's special factors uncertainty probably prompts the fed to weigh a bit. so our baseline is september. we're still pretty comfortable with that but if the data comes in weaker inflation is low, i think they wait. >> >> let's say i have a lot of money. am i buying today? >> i'm not sure that today is going to matter. >> you buy now. >> secular growth. >> first of all this 4% trend that you know we're hearing from the fed governor, that's crazy. we have been nine queers in a row with near 2% gdp. if you can find a company in bio tech or consumer space or technology that can give you, 6, 8, 10% or more earnings growth you're going to bid that up. >> they already moved though. >> bio tech is trading -- if you
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look compared to the growth rates they're trading way cheaper than the market. the tech space in general has a pe roughly in line with the market. consumer stocks had a rougher go in the last year. so those area with stronger growth there's been so much doubt about their success or their sustainable success, i think -- >> >> so you're not saying financials or anything like that. >> oil is a call on the commodity which is different but the industrial space that's done well in february really hard for me to see there's going to be enough to keep that trade going. the same for materials. i think you want to buy those longer term themes because the economy, putting aside today's job number is a little bit sogier. >> so last question, yesterday the euro dudes went to 19 on growth from 15 for gdp. do you believe it number one? and will that help support the euro? >> sure f they're right that would be wonderful.
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ecb qe is working. momentum is looking better. credit creation is picking up. it's probably optimistic. they're at 1.2% which is on the higher end. so a lot of people are sket cal of that skeptical of that number. >> it would help the exports. psychology would improve because you wouldn't think that was happening. all right. thank you back to your day job. >> at yahoo! >> how are you feeling about the company. >> it's great. it's not a problem. >> all right. >> you guys we talk about how we countdown to the jobs report. we count it down to the second. we watch the clock the whole way through. what we should tell you is there's a note from washington today about a potential data delay we had bad weather and
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that's delayed the period opening of offices. it's going to be delivered instead of giving directly to reporters at the labor department like we usually do. that should keep us all on our toes. >> climate change. hurting the delay of our jobs. you saw last week it caused the syrian war. you saw that right? >> what. >> caused the syrian war because of a drought or something. weren't there conflicts in the middle east before this year? >> stuff has happened. >> now it's effecting us. now it's effecting -- who is doing it today? hampton? >> i'm going to say weather is effecting things. >> wouldn't you say weather is effecting things today? how about hah? >> you never know when -- you decide when it's climate change and other times you decide it's weather. >> i'm going with weather. today it's weather. >> that's because it's cold. but it doesn't make sense. anyway, coming up, harrison ford
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is no stranger to danger. we talked about it but now we'll show you more images. he's well-known for doing his own movie stuns and he's an avid pilot of small planes and helicopters. this morning he is recovering after a crash. we're happy to say he's many good shape. we're going to have the details about what happened when we come back. but first take a look at this day in history. you can call me shallow... but, i have a wandering eye. i mean, come on.
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how much did international visitors spend on travel related expenses in the u. s. last year? an estimated $222 billion. >> welcome back this morning. actor harrison ford is hospitalized after making a crash landing in his vintage plane. it went down after taking off in
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california. >> you are hear the panic in his voice. action star harrison ford radios air traffic control moments after take off. >> 233. >> flight invuk to charlie thompson said it looked like a routine take off from santa monica airport. >> it just sounded like -- >> he watched in horror as the plane tried to turn back to the airport. >> it was clear whoever was flying that aircraft was going to crash. >> even more respected as an experienced pilot. those in aviation believe he crash landed on the golf course for a reason. >> you're taught the number one priority is the safety of people on the ground and the golf course was the place he could land which was the safest for the local community and making
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sure he didn't endanger the lives of the people in a local area. >> look for a golf course. >> and when you're up in a plane you can see them. it's obvious where they are because there's nothing else will. >> except for the guy on the golf course they interviewed. >> i hope he's okay and he's fine because i was going to make one comment but it probably wouldn't go over well. i was going to say but -- >> oh no. >> harrison ford is all right but the guy took a 7. so there was some collateral damage for the guy. >> i think he's okay. >> yesterday they said he was in critical condition but now they have upgraded that. >> >> it's indiana solo. >> all right. in other news other aviation news investigators are trying to figure out what caused a delta jet liner to nearly slide off a
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runway at laguardia airport yesterday morning. one other time we weren't so lucky. the jet was in route from atlanta. passengers were quickly evacuated and shutdown. flights were diverted. >> i saw that yesterday. this picture today was more frightening. >> it shows you where the water is. >> where's the wing? one got pulled off. >> laguardia is one of the hardest airports to land at. and the other piece of it is that the beginning of the runway exists over the water and because the water gets so cold in the winter the tarmac can
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actually ice up much quicker. >> but you can see the way it -- you have to defer to the print media. the plane skidded off the runway. no one is saying there's a plane crash at laguardia. >> if i was in that plane i think i crashed. >> okay. >> if the wings are falling off the plane, i crashed. even if i landed. >> they have to pop an emergency door to get you off. >> historically it's not going to be called a plane crash at luguardia. if you were in a car and this happened you'd say you were in a car crash. >> if you get a dent on your car that's a car crash. >> was anyone -- >> there were some injuries. >> slightly injured. are they all out of the hospital at this point? >> i don't know where they are. >> all right. >> when we come back this morning, can the snooze button help you keep the weight off.
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taking a look at the stories that caught our attention and when you wake up early in the morning like we all do you obsess a little bit with sleep. every half hour matters. we know that just from
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experience. >> every half hour -- every minute. i would say maybe every ten minutes matters mentally but i can now tell you there's a new study out that says every half hour does matter in terms of keeping your weight down and off the road to diabetes. >> which is weird that more sleep, you would think if you sit longer that would make you fatter. >> but your body is recharging and rejuvenating. if you shortchange it your in trouble. >> today is day five of the week and i said that really is -- three is miserable. when it has a three handle but i have my own sort of built in snooze button. i'm never asleep. i always turn the alarm off before it goes off. >> i wake upright before. >> i may stay there for awhile but i never -- >> i get out of there
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immediately. >> you do? >> i don't get out of bed. >> my wife i try to run out of the room immediately so i don't wake her up. >> very polite. >> i thought she ran out of the room if you woke up. that would normally be her -- >> try to get 8 hours. that's the message. >> something might get started. that's a half hour less than that and you could have some issues. >> i try to keep her asleep. >> it's friday. >> try to keep the viewers awake. another story that i've focused on cheryl sandberg out with a new cal pain. this campaign she started just yesterday. she is doing it with the nba and wnba and warren buffet getting in on the action on twitter.
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we can show a little tweet if we have it. do we have the tweet right there? marry reinhardt is successfully running a $2.5 billion company in a male dominated field. oprah, jeb bush all sorts of people talked about every good company needs good men who know how to leanin together. >> but in terms of business if a meeting, if you're having a meeting that wil -- -- i don't know if this is going to sound sexist or whatever need to sit in the front of the room and if you're a man running the meeting you need to try to call on the women first and if they get interrupted, you need to actively as a man -- this is stuff the guys are supposed to do, you're supposed to make an effort. >> almost like affirmative action. it's not fixed yet. so do your part. >> do your part and it will overtime change. >> she's giving me a look like i lost my mind. >> no i agree with that.
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>> there was some study where there's sil no country in the world where it's absolutely equivalent equivalent. >> i don't lean in. >> there's stuff you can do by the way -- there's stuff that we can do at home. it's not just the stuff we can do at the office. there's stuff you can do with your kids. all sorts of different projects and things they talk about. >> i lean in. >> it's cool. >> teaching boys as well as girls. >> absolutely. >> i prefer in terms of leaning, i would prefer to lean forward for me. but that's just me. >> that's your natural inclination. >> that's my inclination. >> part of the nbc family. >> isn't it similar leaning in. >> leaning forward? >> how is it different? do you know? >> leaning in. >> leaning forward -- how is that different? >> it's about the same. >> i think i might do a little patent infringement on the whole
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idea. >> what did you want to talk about? >> i said enough already. but i didn't see anything negative. >> no, coming up when we return crime fighting by code. how one start up is using the cloud to help police departments track everything from traffic tickets to criminals on the run. we're going to talk to the companies 23-year-old co-founder. joe is going to love the 23-year-old. we're back in a moment. [ male announcer ] your love for trading never stops. so open an account with schwab. and when a market move affects, say a cloud computing stock you're holding, we can help you decide what to do. with tools that help you see how market activity is affecting your positions. so when the time
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welcome back. google wants to help california drivers. a research analyst suggests google wants to learn more about the auto insurance business so it can possibly begin underwieting and sellunderwiet underwriting and selling policies on its own. i have a good driver discount as you can see. >> because you now have a driver. >> that might be why. >> among our stocks to watch today shares of staples rising in the premarket. earnings beat estimates by a penny. sales did fall by 3.7%. they were hurt by a strong dollar and weak demand but there was notable improvement in profit margins. the company announced a deal to buy office depot for $6.3 billion in cash and stock. >> another harvard dorm room start up making waves. trying to make america's street safer. it's called mark 43 and fast company calling it one of the
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most innovative companies of 2015. the goal is to change the way police work is done and bring law enforcement systems into the 21st century. one of the cofounders is here. he is one of the other cofounders we should say of this year's 30 under 30 list. >> tell us what is this exactly. >> we looked at a part that is bad data. you look in terms of how they're collecting it and using it. most data cannot be transported between communities. >> what kind of data do you mean? >> everything from arrest records, incident reports. criminal profile. everything like that. if i pull you over it might be hard to tell with how you interact with every other police department in america. we looked at how can we create the first cloud based platform in america to not only help police departments collect and share this information but analyze it too. >> so you have to go i assume
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county by county district by district, town by town to get them to sign up. how hard has that been? that's what we have been focused on for the last year and a half. there's 18,000 police departments in america. it's going to be a long hall but it's worth it. if you can make an impact in terms of the way we fight crime. >> do police departments want to share all of this information? and are there privacy concerns? >> they do. 20 years ago there used to be a hot of turf wars over it but now they realize, criminals don't respect county lines and state lines. they're going through these communities committing crimes and the police chiefs want to share the data. they want access to it. it makes them safer and communities safer. in terms of data privacy now the fbi has rules in terms of how
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you put the data in the cloud and share it. we can make sure we protect it in the west way possible. >> you said you need a marquee client first. do you have one? >> yeah. we'll announce it in the next few months. >> does that mean we will do it for free. >> it's tough. in this industry there's a lot of industry incoupleumbents. >> who do you compete against? >> old softwares that don't have a modern platform. they build these old record systems but we're doing something completely new. >> so in terms of -- not that i've gotten pulled over in awhile but, you know the cops in their cars have a computer. >> you have no car. pulled over how.
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>> is it that software or web based? >> yeah it's web based. it's part of that. they take your license and punch it back in the car. they run a background check on you and enter information about you. they replace a lot more of that. >> use something piled on top. >> it's one more way on top of the an old infrastructure. you have to replace the way they're doing it in the first place. >> i assume the hardest part is finding a way for them to import the data into the new system. >> that's a great question. it's something we spent a lot of time on. you have poorly structured old data. it was built in the 90s and we have a whole team of engineers that focus just on that type of ill port
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import. >> can you find a way to capture the information and transport it? >> the old stuff as bulk. a lot of it is manual data. so i might not be able to automate all of it but we can automate and validate as much as we can. >> let's talk about the economics of all of this. >> for sure. it would be an annual subscription. >> yes. >> if there was a police chief watching us right now, how much is it going to cost a year. >> depends on the size of the department, right? so a good probably $60 per month per officer. >> is that much cheaper than what's on offer from other companies. >> you look at these companies and they charge you 10 or $15 million. no police department can afford that these days. it's priced like an evolveling platform. so we're not going in there and charging them 50 or $60,000 per small fix, right? >> i probably should have asked you at the beginning and we have to run but what made you start this? what was the moment for you? >> so we had a class at harvard
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when i was a junior and one of our professors was a u.s. army ranger. a lot of the guys in his units went into the state police and we saw the issues they face in terms of their safety and day athey're trying to collect. >> you're playing this over the long haul. this isn't going to be a quick fix or easy money. do you have funding that will allow you to play that the right way. >> yeah, we raised a good bit of venture capital to do that from traditional vcs. so much start ups saturated everything else but no one is tackling law enforcement technology. >> because it's hard. >> it's hard but those are the best problems to solve. >> thank you for coming in. >> thank you so much. i appreciate it. >> alec baldwin was riding a city bike up the wrong way. >> got a ticket. >> got in trouble and yelled at the guy and didn't have his wallet. so you can get pulled over an oi bike. >> that information could be
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entered into this. you don't have a car. >> i rent cars occasion mali and drive cars occasionally. i like to drive fast as you know. >> when we come back this morning. >> as long as it's not a stick. >> breaking into the chinese market isn't easy business. companies are finding they first have to understand history. a message to ceos from a veteran journalist covering the region next. first as we head into a break check on the most clicked on stories on can it make a dentist appointment when my teeth are ready? ♪ ♪ can it track my crew's performance, and protect their heads? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ at cognizant, we see opportunities for every company. to meet the new digital demands of their customers. can it process my insurance claim?
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♪ i want to ride my bicycle ♪ check out this video from business insiders. shows two dangerously over loaded bicycles in shanghai. it does show how people get things done there. we're talking about china this morning and what u.s. companies want to do -- who want to do business there need to know. confucius may be the most important management consultant in history. he lived over 2,000 years ago but he influenced over half a billion people and could be the secret recipe for asia's economic rise. joining us this morning is michael shuman. he's also the author of
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"confucius and the world he created." thank you for being here today. >> thanks for having me on. >> you know thinking of confucius as a management consultant is a different idea. not something i thought about before. how did you get onto this? >> what i found, i've been living in asia for 19 years and, you know every society is based on ideas. you know our ideas are based are greek philosophies and christians. and in asia society is very much based on confucian ideas. and that includes how companies operate, how ceos think, how management relates to their workers, how they make decisions. so if you're going to do business in asia you actually have to kind of know about some of the philosophical background. >> what does confucius say? >> i think what -- i think confucius would look at probably the most prominent chinese ceo jack ma and say he's a pretty good confucian ceo.
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he would expect a leader to be a very strong leader but also look at the greater good. jack ma talks all the time about how his company should be more of a company. it should do something greater for society. when you look at the way he built loyalty among his employees, created wealth for so many people in society overall, i think that confucius would say maybe he's a model for how a modern ceo should be. >> what are the other tenets for confucianism? >> one thing i read was how modern some of his ideas on economics are to us today. he was laissez-faire in his economics. he thought good government should be small government. if the government intervened too much in the economy, if it imposed taxes that are too high, you're depriveing people of -- >> whoa whoa. this is not modern thinking.
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this is from 20 years ago when we thought capitalism was the way in free markets. modern think has the opposite. he says there should be more workers, people should earn their own success. government should get out of the way. government shouldn't use resources because it takes away resources from the private sector to flourish with. that's incredible he said that. modern theory has us going the other way, right, andrew? >> kind of sort of. >> at the same time, though, he was also a little bit distrustful of wealth. and what that turned into in later years was the confucians believed that too much concentration of wealth was actually dangerous. >> to me -- i looked at it closely. nobody supports greed. and he was basically making a comment about greed. a man that gets wealthy shouldn't just have these flowing beautiful robes and shouldn't splurge on himself.
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but he never said anything about the earned success or that a profit motive was bad. and there is a difference between greed and the profit incentive, right? >> there is. there is one passage where he says that the gentleman knows what is moral and the small man knows what a profitable. so he does suggest that seeking too much profit may distract you from the proper path. at the same time he also felt that if you earn wealth in the proper way, if you were a good virtuous person, you happened to make money, that's great too. what did happen in later years is the confucians went in favor of what would be welfare policies. like certain kind of welfare policies. so he did believe government had a role. he believed government had a responsibility to achieve greater overall economic development and to rise the people up as well.
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so he did say -- he did see a role for government. he just wanted that role not to deprive people of the fruits of their labor. >> michael, thank you for joining us today. >> thank you. >> everybody, the book again is called "confucius and the world he created." thank you for being here. >> congratulations. coming up mark cuban warns that we could be in the middle of a new tech bubble. and it's far worse than the dotcom version of the late '90s. he was talking about the private market more with the application environment out in silicon valley. and we'll talk to a man who lived through it a all. steve case weighs in on the bubble debate. he was on the right side of that deal though wasn't he? plus one of cuban's fellow "shark tank" hosts will be here. daymond john will be here when "squawk box" comes right back.
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a what's that thing? i moved our old security system out here to see if it could monitor the front yard. why don't you switch to xfinity home? i get live video monitoring and 24/7 professional monitoring that i can arm and disarm from anywhere. hear ye! the awkward teenage one has arrived!!!! don't be old fashioned. xfinity customers add xfinity home for $29.95 a month for 12 months. plus for a limited time, get a free security camera call 1800 xfinity or visit . the jobs report is just 90 minutes away. we've got the three things you need to watch when the numbers hit the tape. plus mark cuban warning of a bubble. steve case and daymond john tell
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us if he's right and what it means for the digital age. and your chances of surviving a zombie attack comes down to location location location. new research on infection mapping from cornell as the second hour of "squawk box" begins right now. ♪ doing a little walking dead. i just saw rick without a beard. been a long time. you're hip to what i'm saying? yeah? that's cool. you knew what i was talking about. rick has a big beard now, doesn't he on "the walking dead." welcome back to "squawk box" here on cnbc, first in business worldwide. can you hang around? you'll get all my cultural references, i think. movies and everything. i need you, man. anyway. i'm joe kernen along with becky
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quick and andrew ross sorkin. the economy added 240,000 jobs last month. the unemployment rate expected to tick down to 5.6%. i think it ticked up last month. now it will come back down. government offices in washington are on a two-hour weather delay. so there may be a slight delay in the release of the data. in a few minutes we'll tell you the three things you should watch about today's report. and i'm sure average wages is one of them. and later we're going to get former fed chair alan greenspan's take on the u.s. employment picture on his 89th birthday. >> yep. 89 years young. >> good old pisces. >> you? >> yes. >> when i say i'm a pisces you say something else. >> andrew can you bring us --
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>> as a pisces i will bring you the top stories. >> you're on the bubble. >> i'm on the february 19th date which is depending which magazine you read i could be a pisces or -- >> so messed up. you never know what you are. it's tough. >> coming up -- not coming up. our top stories right now. we've got a little bit of trouble for apple pay. "the wall street journal" reporting that the mobile payment system has now been hit by a surge of fraudulent transactions. frauds fraudsters are taking the credit cards and because you don't actually have to have a physical card. if you have the information, you plug it into the phone and the phone becomes the card. then they're going to apple stores and buying stuff from the apple stores. also passing grades for all 31 u.s. banks in the fed's latest capital test.
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the next test results will be released next week. also watching currencies this morning. here's what's happening. the euro fell below $1.10 for the first time since 2003. that came after the ecb released deals of its massive stimulus campaign. and look at u.s. equity futures at this hour ahead of today's report. all of this could change at 8:30 when we get those numbers. the dow looking down right now like it would open off about 17 points and the nasdaq off about a point, the s&p off about the same. mark cuban believes we are in a tech bubble far worse than in the year 2000. he stressed it's not a stock bubble that we're talking about in the public market. rather a warning to private investors who are investing in that market. he says i never said in the public market that there is a bubble. i don't believe there is at all. but for private investors who are making small investments thinking they're going to hit a grand slam, well small individual investors are putting their money into apps with no
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whans of getting their money back. joining us now is steve case. he is cofounder of aol and current chairman and ceo of revolution. also joining us right here on set is daymond john. he is ceo of fubu. he also sits next to mark on "shark tank" and he's involved in a new digital jobs push with capital one. we're going to get to the jobs aspect in a moment but steve we're hoping you can talk about mark's communityents. whap do you think? >> i don't agree. right now less than 1% of americans are investing in these angel networks. and particularly if you go around the country although there's a lot of capital and froth in places like san francisco, new york city or boston, sort of the tech hubs most of the country are in need of capital. most need those angels in their communities to support them.
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i'm hopeful there will be manufacture people who are supportive of these young start-ups. not all will be successful. most start-ups fail. but some will be successful. and some of those little companies will be the big companies of tomorrow creating the jobs and the growth for the communities and for the country. so i'm bullish on it. mark may be skewed by the circles he runs in. the time i spent on the road in middle america, most entrepreneurs don't think there's enough. >> daymond you're part of the crowd he runs in. my bigger thought on this is not whether or not there's a bubble when it comes to these private markets, but his complaint was there's not liquidity. to me the problem was the liquidity the last time around. all the people who kept trading off their shares in the public market. it left somebody holding the bag. at least in this situation you might not pass it on but sort of ponzi schemes from kicking off. >> i hate to say it but what i
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see in the market is yes you have a lot of angel investors who are not qualified coming in. a new gold rush out there. every time someone comes on the tank, they have about $1.5 million and valuing their company at $20 million and don't have sales. i get frustrated. but cuban always invests in those guys as well. so he's kind of talking out of both sides of his face. but he's a tech guy and he's the first one to say, hey, i love taking advantage of a bubble because i was the guy who took advantage of the bubble. so i'm going to have to really lean on where he's at. because i'm getting frustrated as well seeing non-qualified investors going into the market and not getting liquidity. >> well steve, buddy, if cuban took advantage of the bubble what did you -- case makes cuban look like a piker. you're the man there steve. >> actually i remember a conversation with mark probably 16 years ago when he was selling
7:07 am and we were buying a lot of companies there. even the valuation that mark thought broadcast should go was $5 billion or $6 billion. i remember looking at the team saying, wow, things are getting a little crazy here. we live through that. i think this is situation. i think the late stage are getting -- i think the ipo market seems to be showing a little bit more discipline. but it's also important not just to focus on terms of entrepreneurship and start-ups on angel funding or apps or tech. the economy is much broader. there are crowd funding platforms to focus on consumer goods. there are a lot of people who focus on real estate crowd funding or -- >> steve, hold on. he's trying to not let me get my point in. >> exactly. that's exactly what i'm trying to do. >> steve yormi don't remember what we paid for manhattan or the louisiana purchase but trading aol for time warner nothing in
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history comes up to that master stroke. i'm trying to give you a compliment. you just don't want to take it. >> i take it. what's your next question? >> my next question real quickly is, i'm just trying to think about whether the private market could constitute a bubble or a bubble we need to worry about. i'm trying to figure out the size of the private market versus the size of the public market. and i don't think they're equatable because they're apples and oranges probably. but is there any way to give me an idea of what we're talking about here in terms of money versus -- i mean what's alibaba or facebook's -- what's their valuation? we're not even close in the private market, are we? >> i think it's important to take a step back. for individual investors, things have changed. before you could invest in a company, aol raised $10 million 1992. the market value was $70 million. a decade later $150 billion. investors shared in that.
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now for a host of reasons, some including some policy things that have been changed with the jobs act make it easier to go capital but private capital, companies are going private later. investors aren't getting the opportunity to invest until late. they either invest really early in the angel stage or when they're public. individual investors can't access the market. >> steve -- >> structurally i think it's changed in a way that favors institutions that crowd funding provisions that the congress passed two and a half years ago. kind of allowing crowd funding platforms to emerge and giving other people individual investors the opportunity to invest i think is a good thing for them as investors if they want to pursue that and a great thing for entrepreneurs all across the country. >> steve, what do you make of the blackrocks and all of the big institutional funds that are now getting in late stage with what arguably would have been considered public money before?
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so they're private but not really. >> i think having more access to capital if you're an entrepreneur is a good thing. if you want to invest earlier i think that's a good thing. but setting the values of those companies is becoming tricky. some of those really late stage private valuations may have trouble supporting themselves once they do go public. because actually the public market has shown more discipline than the late stage private market. i think the core is how to make sure more entrepreneurs have access to capital at the early stage, the angel stage, the venture stage, the growth stage, or when they want to go public. that will fuel more innovation, more growth, more jobs. >> let's talk a little bit more about jobs. daymond, i know one of the things with your investment is something general assembly and capital one are working on. >> this is my expertise. i leave cubans and steves to talk about that stuff. i'm just trying to learn basic
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technology and sell my wagon of goods, a couple of t-shirts. but capital one's initiative over the next five years to apply millions of dollars to give people the basic technology distills they need. literacy when we first a couple years ago, they needed to have a skill. then we needed to do the reading, writing, and arithmetic. and now you need digital literacy. you can't compete in the market out there. you can't even get past a basic job if you don't know how to use your excel sheets or transfer information around to people. >> how does this work? how do you find the kids that you're actually teaching? >> it's kids. it's people going back into the market. it's empty nesters. it's people who don't understand the basics of technology where it's trading information, exchanging information, accessing it deploying capital, receiving capital. they just don't have the basic skills. that's what capital one is -- >> you're looking at me. you're right. when you said kids yeah. i could use that.
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honestly. i don't know how to do excel. >> probably have more understanding of the digital skills we need but look. in china, i don't have to go to china to the factories or to colorado to the factories anymore because we all exchange the information on our servers, on our websites, on our platforms. and it saves me a lot of time. if you're coming to my job and you are -- you want to get a job with me and you're a designer you can't if you don't have the ability to create these cads online and transfer information. >> can we use that -- you know the other people cuban shmuban. will he send an e-mail to you? like i almost said it earlier. said it on yesterday. we should have him on here to talk about it. we don't need to keep say whag he said. can i say cuban shmuban. >> you can. it'll tick him off.
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but if you don't know how to operate, you don't have that information, you can never talk to the big mean bully cuban. you know? >> right. >> how many total acres do you have in hawaii? >> here we go again. >> you know how many times i say, how many do -- you got -- no man needs that many acres on hawaii himself. i mean you don't have one or two? not one or two that you're not using that you wouldn't miss? >> we could talk about it. >> we have talked about it. >> listen if i go -- if i hang out with my capital one people we'll find a way to go onto google earth and trace every single acre he has out there. >> don't you basically own lanai? >> no. that would be larry ellison. >> okay. which one do you own? malachi? >> no. >> which one with pineapples?
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>> to own any of them is unbelievable. >> i'm from hawaii. i love hawaii. i have some ownership on maui and kauai. >> some ownership. scientific notation. all right. >> steve, thank you very much for joining us today. always a pleasure. daymond, thank you. >> thank you. >> by the way, quick programming note for you. you can catch daymond right here on "shank tank" and tuesday and wednesday nights. every tuesday and wednesday, 8:00 p.m. on cnbc. coming up three things you need to watch when the february jobs report hits the tape later this morning. steve leisman has the details. then alan greenspan on how to get the economy growing and why he says we need more people to produce less. biotech stekteches are hot but are they too snot "squawk box" will be right back.
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over 20 million kids everyday in our country lack access to healthy food. for the first time american kids are slated to live a shorter life span than their parents. it's a problem that we can turn around and change. revolution foods is a company we started to provide access to healthy affordable, kid-inspired chef-crafted food. we looked at what are the aspects of food that will help set up kids for success? making sure foods are made with high quality ingredients and prepared fresh everyday. our collaboration with citi has helped us really accelerate the expansion of our business in terms of how many communities we can serve. working with citi has also helped to fuel our innovation process and the speed at which we can bring new products into the grocery stores. we are employing 1,000 people across 27 urban areas and today, serve over 1 million meals a week. until every kid has built those life-long eating habits, we'll keep working.
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we are counting down to the february jobs report. here to tell us the three things we need to watch when the number comes out is our senior economics reporting known now as steve leisman shleisman. >> is that why you did that?
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>> is one of them wages? >> one is wages. >> is one participation rate? >> that's not -- >> do we have four? is another one average work hours? >> no. >> is another one -- okay. go ahead. >> are we playing this game? becky? >> no i want to hear what you -- >> i got a couple things. one is wages. 2.2%. if you look at the chart which we will in a second it's hard to see any huge gains. the other thing is weather. it was cold and snowy in the east but warm in the west. interesting to me as to whether or not there was some offset there. the initial read, we get the data today to give us the month for february is that this month was colder than last year. and we thought last year was off the chart bad. i am not attributing to a climate change talk. >> shut up. what i was saying is the individual components released
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on friday the three things to watch. you're talking about things that would affect it. well that's a different -- i was saying -- >> the individual things. >> the individual components to watch. >> the other one is energy. energy which you saw from challenger. i got a great chart on this. challenger told us yesterday plus or minus 16,000. that's ten years, 12 years of layoffs in the energy business. >> wow. >> you can see the last two months have been off the charts. >> the last two months have been worse than what we saw after the great recession? >> easily. and then it looks like you can probably add up all of the layoffs and the last two months were greater than that. we extended the chart. had we not -- >> then you need to do that. >> one thing i want to show you is the wage data. look. do we have that data? i think we do. there it is.
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so what does that tell you? it tells you we're getting very excited about plus or minus .2% or .3% on a year over year basis. we have a very long way to go to get to strong wage gains. one of the strong theories is as older folks with higher wages retire in good jobs by the way, or medium jobs they're replaced at lower wages. and this ends up keeping down the average wages down there. not necessarily the wage gains. younger people should have a higher ramp up or slope in terms of wage gains. one thing that could be depressing wages is this turnover. >> do you believe that? >> it's an explanation. i don't think there's any single thing that does it. the jobs numbers have been very strong. you can't really get around that. a million jobs in three months 3.3 million jobs year to date if we do 200-plus today. those are strong numbers. that would tend to dictate or
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suggest you have wage gains out there. we have to look for atlternate reasons why as there is a greater supply of jobs you're not seeing wages go up. >> you're going to be here when we talk to chairman greenspan who doesn't agree with everything you're saying. you didn't see the notes for him? >> no. >> he's saying productivity is holding us back at this point. >> holding back the overall economy or -- >> wage gains and gdp. >> lower productivity mixed -- >> and the demand is still weak as weak as it's been since the depression. and although obviously not as bad. >> i'll give you a copy of them. you can check them out. >> and next time come prepared. >> with what? >> he came prepared with his information. >> his own stuff. >> that is in the next hour. he's got time. the other day he had time to get a hair cut and return.
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>> it was sort of sold as components of the release -- >> i defy you to find the words component of. >> you said three things to watch. >> right. i'm watching for a weather effect, wage effect -- >> while you battle out, we're going to go. we're going to check out some shares. foot locker retailer's earnings beating estimates as same store sales rising in much better than 10.2% last quarter. becky? when we come back this morning, tips from a cornell research team on how to survive if or when the zombie apocalypse actually happens.
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by step. and they'll even call your old provider. it's easy. even she could do it. whatever, janet. for all the confidence you need td ameritrade. you got this. ♪ that was good. if or when the zombie apocalypse does come, head for the hills. specifically the best place probably the rocky mountains. cornell university researchers working on disease modeling
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mapped the spread of a -- at this point fictional zombie outbreak to el strait how an epidemic might spread across the united states. a few takeaways, if you're in a big city you're screwed. your goal for escape is head for empty regions like the rocky mountains. although if you can make it through the first month in a metropolitan area, you'll probably be safer as the infection center probably would spread to some of the surrounding areas. plus you'd have andrew in the city you can imagine all of the stocked shelves and the pantries. and you go into one building can probably find a lot of food. >> we could hunker down here. >> probably here. >> i don't know about the windows. >> but there are at lo of people in new york. >> there are. >> and if most of them turn into zombies, it would be crowded with zombies. that would be difficult. >> they might eat you or something. >> one thing you can do is spread guts and intestines all
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over yourself from a zombie. then you can sort of blend in as you walk with them. >> go big red. i'm glad my alma mater is doing this research. very important. >> you're saying that kind of sarcastically, aren't you? you don't think this is -- okay. when it comes then you weren't listening. >> i'm listening. staying in the city i'm going to try to ride it out for a month. >> you don't have a cross bow yet. >> yo i don't have a cross bow. no. i have my words. coming up alan greenspan is going to join us on his big birthday. he says the declining rate is causing a chain reaction that's holding back economic growth. he's 89 years young today.
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♪ welcome back to "squawk box" this morning. among the stories front and center right now, google's wireless service may launch by the end of the month.
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only work on the nexus brand and not other android phones. we'll keep watching that. also amazon opening a store on alibaba's business to consumer platform. the move should boost awareness of amazon's brand in china. so taking advantage of the alibaba platform for amazon. we'll see if they try to do the opposite here. also a hedge fund manager and protege is shutting down his fund. patrick mccormack now says that the best time may be to close this 15-year-old firm after strong returns early in the year. i think they were up about 4.6%. they've been doing pretty well for a long time. we're about an hour away from the monthly jobs report. let's turn now to the man who led the federal reserve for nearly 20 years to find out what the market should be paying attention to today. alan greenspan, president of greenspan associates also
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author of the recent book "the map and the territory." mr. chairman, happy birthday. >> thank you very much. i appreciate that. >> you are very withelcome. we already talked about something is going to sing to you happy birthday mr. chairman. do you want andrew or becky? >> becky has a little more song in her than you gentlemen. >> thank you, mr. chairman. >> let's get to a couple of things that is interesting in points you made recently mr. chairman. and one is that we're under the impression that we're very productive here and that the country has been thriving because our productivity. but you think one of the reasons we've been growing below plan in terms of gdp is if productivity isn't where it should be. >> absolutely. if you look at the data we'll have zero productivity growth in
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the last couple of years. productivity growth almost exactly percentage point to percentage point shows up in the gdp figures slightly adjusted for the non-business sector. but the point of issue here is we are not showing an increase in output per hour. and that has ramifications through the average wage issue employment. in fact, if you don't get productivity right in an economy, your economy is in trouble. >> and it's hard for lay people to understand what you're talking about. we all think we're working -- i'm trying to be productive. we're working more hours. productivity could be held back by what factors in your view? not just whether we're coming to work early and leaving late. >> well it's got basically to
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ask the question and answer it of course how much do we produce in the hours that we expend? and that obviously affect this wage rate because one of the laws we observed for a long time is that the real wage of the economy and that includes compensation for hours for all levels including profitability, but the real wage must move with real output per hour. and it's double entry bookkeeping, in a sense. and it is and that's what the problem is. we're probably 1% to 2% lower in gdp growth than we should be. >> does this half to do with not making making long -- we talked about this in the bast.
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we don't make long-term. the savings rate hasn't been what it should be recently. one of e the i think ths you attributed that to is the bipartisan -- you haven't blamed it on either party, but the increase in entitlements. medicare c and now we've got all these entitlements in the last six years or so. if that holds down a saving rate, is that why we don't have productivity growth? >> well that's what the datas show. remember what we're looking at. we're looking at an annual rate of increase in entitlements close to 9% a year. and these are mandated. so it's not an issue of the market affecting them at all. but it's a sad occasion because most of the people the vast portion of them who actually receive benefits believe that they're getting their money back with interest. and essentially that's what
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originally, say, what social security was when franklin roosevelt signed it into law in 1935. it was a defined benefit plan very closely related to the private sector. and everybody believed that it was their employer's money, their money, plus interest. they were getting back. and in all of the entitlements in a related form it's not the same, but medicare is very close to this. and the two big ones clearly are medicare and social security. what we have then is a tough political problem. every person who is involved in getting benefits with rare exceptions believes it is theirs by right. and try to take that away politically is the most difficult thing one can think of for somebody running for office. >> alan i want to raise the issue of energy and price of
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oil. one of the things we saw yesterday in the challenger report in terms of layoffs was huge number of layoffs in the energy sektsctor as you might expect. but the rest of the world is supposed to be a beneficiary of the low oil prices and it hasn't felt that way. at least you're not seeing that in the numbers yet. some people say if you even look at the fed numbers that all the growth we've had over the past couple years is just in energy. and if you strip that out, it's nothing. >> no. energy -- the 50% decline in the price of crude oil has had a significant impact on consumption expenditures in the united states. if we in fact were not getting that, we'd be in poor shape indeed. but the affect of the price decline is real. it is a one shot affect. it doesn't continue the growth rate. it's a one shot surge in the
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level of consumption. then it flattens out. but the effect is real. and i think it will continue provided we don't reverse the price change very rapidly. >> we've talked about how difficult it is for us to export with where the dollar is because of the weakness in europe. so we're all pulling for europe to maybe start doing a little bit better so you know for a lot of different reasons. but in your view the euro -- the way that the common currency was set up is almost destined eventually for failure. is that true? or if they did get their fiscal houses more coordinated and banking more coordinated, could it still be salvage sndd? or do you still think it's going to collapse? >> i think not. you have to remember the euro did work for nine years.
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1999 through 2008. but the reason it did was we were in a global boom. and the issue here is competitiveness between countries. in that nine-year period, almost anything you produced you could sell. and as a result even though unit costs of for example, greece portugal, and spain were rising much faster than germany, nonetheless they were able to have a close spread against basically the unit costs. but of the implicit exchange rate they were dealing with. and what the problem is today is that you have a number of countries who ordinarily given what they're dealing with they would be devaluing.
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remember, the original purpose of setting up the euro was a step towards political consolidation of europe which most european intellectuals and analysts and policy makers all realize that we had just had two major world wars on the the european continent. and only consolidation politically would essentially resolve that issue. and that was what they were trying to do and indeed i think are still trying to do. and i don't believe as i stated before that the euro can hold together unless we go to a political consolidation of europe. economic pressures pulling it apart are just too extraordinary lie strong and the continuing bailout of greece suggests how strong they are. >> you've made some comments
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but not a lot, on qe. i know you don't necessarily want to evaluate you know your successors. a lot of the moves. but let's talk about qe in europe. it just seems -- it seems very difficult to orchestrate. will it work over there? do you think we got a large benefit here? or does it really just gloss over our lack of long-term investment for what we need here? >> well the -- what qe did in the united states both qe 1, 2, and 3 is basically by buying very significant quantities of the issuance of long-term treasuries and mortgage backed securities, we drove the real long-term interest rate down. doing that creates a price earnings ratio expansion because of the arbitraging that goes on
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in the market place so that the low real long-term interest rate showed up in a higher price earnings ratio for income producing properties which are stocks, property of all types. and that's real. obviously if and when interest rates start to move that's going to get reversed. but we're still in a position where we can't argue that we're extremely over-valued in the marketplace even though i know we're talking about individual bubbles. bubbles i might say parenthetically are essentially an aspect of human nature will never be changed, and what we have to do is to recognize that we can absorb a bubble without economic consequences as the end of the dotcom boom showed us.
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but if we get leveraged types of toxic assets we have a very serious problem as 2008 and 1929 showed us. sfl all right, mr. chairman. once again, want to wish you a happy birthday. i felt like you look exactly like you used to look when i watched you testifying against congress. and i understood back then and understood today as long as i think real hard i get some of it. but you haven't changed a bit from 20 years. >> haven't aged. >> when you were sitting there fielding the same kind of stupid questions but at that point it was from politicians, not from people on tv. >> there are no stupid questions. just stupid answers. >> anyway have a great day. >> thank you. >> we wish you well and appreciate you stopping by today. >> happy birthday again. >> thank you very much
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everyone. >> after listening to that what happened to our worry about the entitlements? the long-term entitlements in the last two years? >> it's on the back burner. although i will say there are still a large group of people that say it needs to be a key issue in the 2016 elections. >> people don't know. >> judd greg and evan bayh have been going around -- >> they're both gone. >> but they're still actively involved with the committee. >> but a couple things have happened. deficit has shrunk. health care costs seem to have stabilized in ways we didn't expect. but some things are -- i'm not saying we don't have a problem. >> but that's part of the same phenomenon we were just talking about. that is with overall demand and really the recovery. and i don't think anyone ties our current malaise to the looming unfunded liabilities like the chairman just did again. we think we're out of the woods now with medicare and social security. you haven't done anything. >> okay.
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coming up when we return a weather event that could give flashbacks to the 1990s. we're coming right back in just a moment. ameriprise asked people a simple question: can you keep your lifestyle in retirement? i don't want to think about the alternative. i don't even know how to answer that. i mean, no one knows how long their money is going to last. i try not to worry but you worry. what happens when your paychecks stop? because everyone has retirement questions. ameriprise created the exclusive confident retirement approach. to get the real answers you need. start building your confident retirement today. these
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i am el nino. all other tropical storms must bow before el nino. >> el nino is back. i was joking with joe that i called it el nino. el nino government scientists saying the weather pattern formed in the pacific ocean last month is part of it but it's weak and will have little significant impact this year. it is characterized by a buildup of warm weather in the eastern pacific to disrupt high atmosphere winds and affect weather across the globe. el nino is of course spanish for the nino. >> why would we -- we know what el is. why wouldn't we translate the nino? >> it's from the skit. >> all right there. we go. let's look at the stocks to keep an eye on this morning.
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staples reporting a profit of 31 cents a share. that was 1 cent better than expected although revenue was slightly short. they did see an increase in profits across the quarter. foot locker adjusting $1 a share quarterly profit. see an increase of 10.2% was well above forecast. dick's discount retailer big lots beating estimates by a penny. however, the current quarter and the guidance are shy of the street's forecast. and fitness center chain lifetime fitness in advanced talks to be bought by private equity bidders. listen up, joe. >> what? >> is that your gym? >> that's my place. i'm messaging someone right now about today, in fact. yes. >> wow. >> that's unbelievable. >> it's owned by private equity. >> that's okay. >> going to load it up with debt. they're going to strip it.
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no they're not. they're not going to do any of that. >> it's a great place. huge. have you seen them? >> ai have not. >> really good. >> equinox is owned by a private company. >> the monthly payments are good. >> it is. sticky. >> it's good. coming up the biotech sector out-pacing the rest of the s&p so far this year. a significant deal in the sector have some analysts questioning if there's a bad move rising. 80% of the poor in africa are rural farmers. 96% of them are doing rain-fed agriculture. they're all competing with each other; they're all making very low margins making enough to survive but not enough to get out of poverty. so kickstart designs low cost irrigation pumps
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enabling them to grow high value crops throughout the year so you can make a lot of money. it's all very well to have a whole lot of small innovations but unless we can scale it up enough to where we are talking about millions of farmers, we're not going to solve their biggest challenge. this is precisely where the kind of finance that citi is giving us is enabling us to scale up on a much more rapid pace. when we talk to the farmers and ask them what's the most important thing. first of all they say we can feed our families. secondly, we can send our children to school. it's really that first step that allows them to get out of poverty and most importantly have money left over to plan for the future they want.
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the biotech sector is up nearly 30% over the last year. and the big m&a deals keep coming. the latest of abbvie acquiring pharmacyclics. over $20 billion here to discuss before approaching double territory is jason culvert, biotech analyst at maxim group. there's always a reason to explain why we're not in a bubble. and the reason right now is that made sense yesterday. i looked up the btk inhibitor. that is potentially really exciting in the possibility of
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for what they do with cancer. and they're not developing these drugs. they're being developed in biotech. it makes sense it's happening. >> it does. you look at what gilead is doing. they're going to pay for that $11 billion acquisition in the next two quarters. the free cash flows is just e enormous enormous. what we're seeing is these companies are recognizing that now is the time to acquire products. and we're seeing it in the mid-caps and small caps. when you talk about the zombie apoma apocalypse apocalypse, it's going to be biotech bringing them back to life. >> in the will smith movie, what was that -- i am legend or whatever he was a biotech scientist trying to -- and he finally did find something that reversed it. and initially it was going to be a cure for cancer. it got out of hand. and emma thompson was there. >> you can look at medivation.
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look at the success that company has had. now they're talking about a drug's utility in triple negative breast cancer which is an unmet medical need. so if it shows utility in that indication, then the stock has potential. that indication should be at least at large if not larger than prostate cancer. so the upside is enormous. while it's easy to step back and say is this just an m&a driven frenzy driving the bubble? i see a paradigm shift. i see more drugs being developeder clinical failures. >> you don't foe what the run rate is -- like yesterday it was $21 billion and you look at what pharmacyclics generates and you can't use that. then you've got to look at that one class of drugs and assume that's a $2 billion drug. >> this is the celgene story. if you look at the introduction
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of how it changed edd edd edd edd hemotological. but into solid tumors then the upside in hind sooigt you'll say this was a cheap acquisition. i find it interesting that j & j walked. j & j has a very rigid discipline. i remember when they crossed the scientific data and hurt boston scientific. >> all right jason. thanks. we'll talk off camera. you can hear the music. thank you. >> okay. when we come back this morning, the jobs report just over 30 minutes away. our panel of experts are ready with predictions and reactions. "squawk box" will be right back. at ally bank no branches equals great rates. it's a fact. kind of like mute buttons equal danger.
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at ally bank no branches equals great rates. it's a fact. kind of like shopping hungry equals overshopping. the final countdown is on. we're just 30 minutes away from the numbers of the month, the february jobs report. >> our all-star panel is ready to tackle the data and tell us if it sets the june rate hike
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from the fed. plus jim paulson on what investors need to do with their portfolios now as the countdown to jobs begins right now. ♪ live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box," everybody. this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. the jobs hour has arrived. attention all you high frequency traders out there, there could be a slight delay. we're not sure how long of a delay, but getting to today's number may not be had instantaneously on the second. that's because government offices in washington are on a two-hour delay this morning. ahead of the numbers take a look at this and you'll see the futures have barically budged. dow up around 13 points ahead of this.
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s&p up by 2 and the nasdaq by 5. here are other big stories we're watching at this hour. japan's nikkei closing a a 15-year high. that's just beneath the 19,000 milestone. and the weaker yen, that led to a rally in exporters included honda, canon, and panasonic. the aol cofounder argued this morning that less than .1% are investing in so-called angel networks. and speaking of tech, apple pay has now been hit by a surge of fraudulent charges. and using the mobile payment system to make purchases in some cases at apple stores. so there you have it. few stocks on the move this morning. gap posting a surprise drop in monthly sales. february comp store sales declined 4%.
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and foot locker beat the street on the top and bottom line with same store sales rising a much better than expected 10.2% last quarter. finisar's latest results topped estimates. giving an upbeat outlook as well. up about $1.27. that's about a 7% move for finisar. stocks breaking two days of losses ahead of the jobs number. history has shown sometimes a good jobs number may not mean a good day for the market. dominic chu did digging on this. is there a pattern? >> you can talk about cyclical economically sensitive for stocks versus the defensive names overall. but we asked the folks over at the investment group and their analysts there just wait around in numbers all over the market. and on jobs day, are there particular parts of the market that out perform or underperform? now, let's just go recent history over the last couple years. gives more of a comparison about
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where we are today. if you look at the numbers when we have a positive job surprise we somehow get a jobs number that's better than we expected. financials tend to outperform. they're up on average over the last two years on jobs day. industrial stocks also cyclical economically sensitive in nature. they're up about .8%. and then all of the shopping trade there, it's up about .7%. these are the best performers when the jobs numbers are better than expected. take a look at the ones that don't do well if the jobs number disappoints. technology, also one of the biggest losers here. on average down about .1% as a sector overall. then the banks as well down about that same amount. health care stocks interestingly enough here up about only .1% over the last two years as a sector if we miss on the jobs number. the interesting part about this is over the last two years the markets have been generally
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trending higher. the average gain for the s&p 500 on all jobs days is around 1/3 of 1%. on the days we disappoint -- if we beat a jobs number you go up about half a percent. the trend has been positive so far. we'll see if this plays out in today's jobs numbers. let's go to our all-star panel and talk fed, the economy and markets. mark zandy, and ethan goolsbee. and wolf was i think a running back at penn right, your buddy? >> yeah. he was the guy who runs into people. not who makes the good moves.
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>> yeah. exactly. and loni chen is a director at stanford university who i'm sucking up to because someone might want to go to stanford some day that i know. thank you, gentlemen. and let me start with you, mark because i've been thinking about something. leisman did his report and i want to did you three reasons that i think maybe we could be surprised, maybe not. but you got the energy layoffs, the crappy weather, and there was a third thing. and the strong dollar. unless exports. >> yeah. well, i think the energy sector is part of it. we're starting to see layoffs there. the challenger report yesterday showed that. the weather is clearly going to play a role. you can see it in the economic data. there's a strike at refiners. that's going to cost 5,000. small on the grand scheme of things but will weigh on things. so i think everything is
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pointing to a soft number. >> under 200? >> it's possible. if you do the arithmetic it should be higher than that. but if you told me you came in around 200. >> austin i don't remember. you were right by being pessimistic for a long time. you think we're under 200 today? >> i don't think we'll be under 200 today, but i think it's coming. because the big puzzle of the last year has been the job market really knocking the cover off the ball and the growth being pretty modest. and the only way we've been able to do both of those things at the same time is because productivity has actually been negative. and that's highly unusual. so i think that likely the jobs are going to go down to where the growth is which is modest rather than the other way around. >> i would disagree with that. because one of the key statistics leading indicators is the number of open job positions. that has risen to a high.
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that's up from a year ago. given that given i hate the word, but momentum in the job market, you've got these human resource functions in all these businesses in high gear right now. i think we've got a lot of room here for -- we've got 3 million jobs last year. i'd be very prized -- >> it's very confusing that you two guys that look similar are talking and disagrees. people have said you look like twins almost. it's just very confusing. >> clark kent and superman they don't always get along. >> lonnie i don't know if you got to see former chairman greenspan on. austan just talked about productivity. he side that the entitlement spending has risen in a bipartisan fashion is causing the savings rate to be down causing corporations not to invest for the long-term, and there's an underlying weakness
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in demand which explains this weak recovery we've had. has your work shown anything similar to that? >> yeah. i mean i think there's no question that our failure to -- it's a bipartisan problem, i'll say. one interesting data point is you have the social security disability trust fund that will be exhausted in 2016. that's an under the radar issue that people are looking at. i think entitlement spending is a huge issue. >> with the productivity that austan was talking about why is that weak right now? why are we getting less out of each hour of work? >> again, i don't know why that might be. what i will say is i do think for this month in particular it wouldn't surprise me at all to be sub-200. i think the other factor to add
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into it is the west coast port slowdown. >> so look if i'm a business person and i am. i mean, i hire lots of people. >> but i'd rather think of you as an academic. >> all right. you can do both. so i am a business person. so labor costs have been very very low for a long time. the wage growth has barely kept base with inflation. so if i'm a business person i'm not really all that interested in investing in things that save labor. it's only when we get to a tight labor market costs start to rise that business -- >> greenspan just said the reason it's all part of the problem, that the reason there isn't wage growth is because of the productivity. >> well i mean you know this is -- there's a lot of spontaneity here and it goes back and forth. but i think the causal relationship right now, the strongest causal relationship is between wages. and you can see it in the type of investments.
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businesses aren't investing in information processing equipment. things that are important. >> we've got to go, aust aan, you're supposed to know. but you should be able to -- >> i do know what's going on. >> well tell me what's wrong. >> i think gdp growth in the first quarter is going to have a one handle. if we have a one handle on gdp, it's only a matter of time before the jobs are going to slow down. >> then why -- but why do we have a one handle? after six years, seven years. >> we're trying to shift away from consumer spending and housing as a main driver of growth. and with the dollar going up as much as it's going, that shift to more exports and more investment, i think, is going to slow down. >> oh, god. all right. we've been waiting forever for 3%. and i'm with you. i don't think we hit 3% this year. who did we have that said definitely? >> that was me.
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i was here wednesday. we're going to get 3% easy. no problem. >> and bullard was here before. >> i think we get a hand on q1. we'll get a very important number. but when you're creating 3 million jobs a year that is about as strong as it gets. and you get a little bit of wage growth consumers are going to be spending very -- and then you have the gasoline savings. i don't see how we don't get 3%. >> all right. stick around guys. our panel's going to be here. we'll have some final predictions in just a couple of minutes. and then hopefully we get the number by you know before 9:00 right? >> i think it will be pretty fast. just released slightly differently. it's two-hour weather delay of opening for government offices. instead of handing it directly to reporters. >> anything thing to attribute to -- seriously. >> that means we need more government spending to -- sorry. when we come back this morning, we will talk about the rise of the machines. a new report predicts 1.2
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million robots will be working at manufacturers by the year 2025. will they put all the people out of work? we'll have that story next. [ male announcer ] your love for trading never stops. so if you get a trade idea about, say organic food stocks schwab can help. with a trading specialist just a tap away. what's on your mind lisa? i'd like to talk about a trade idea. let's hear it. [ male announcer ] see how schwab can help light a way forward. so you can make your move wherever you are. and start working on your next big idea. ♪ ♪
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♪ you've got a friend in me ♪ ♪ you've got a friend in me ♪ welcome back everything. disney ceo bob iger announced that "toy story 4" will be coming in november. but apparently that won't pick up where "toy story 3" left off. instead it's a romantic comedy that won't focus between the toy and the kids. it comes from an interview with jim morris that was posted on the blog disney latino. it is expected to be released in june of 2017. >> that's very interesting. i assume it would involve woody. woody had a thing if you might recall. and woody liked jessi. >> but jessi likes buzz. >> it just said the toys are not -- >> no not the interactions
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between the kids and the toys. >> just the tois and the toys. >> but a romantic comedy though. there was -- one of the beautiful romances was of mr. and mrs. potato head. don rickles and george's mother costanza's mother. "toy story 3" almost won best picture. which is incredible. a sequel and animated almost won. >> did you like 3 more than 1? >> no, i liked it better than 2 though. >> i think they could have used wayne knight a lot better than they did. and it took place in a high-rise. >> if the "squawk" career doesn't work out, you can work for them. that was ned beatty in 3 that did the teddy bear's voice. >> no way. >> good trivia there.
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we're going to talk jobs right now. a report estimating there will be 1.2 million robots working at u.s. manufacturers by 2025. this goes to my issue here. as the use of robots rise what does it mean for america? mary joins us with that. >> hey. the company is best known for its robotic vacuum cleaner the roomba you can see over my back shoulder. and this bot you see behind me. ten years ago irobot said you couldn't find another robotics firm within 150 miles of this location. today the company counts over 100 within 30 miles. this confirming a trend noted by boston consulting group which sees global spending on robots hitting $67 billion up from an estimated $27 billion this year. now, this should be a positive
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for manufacturers. bcg's health circuit says as robotic spending goes up labor costs will come down. >> we're thinking about something like a 16% drop in the labor costs kr. >> leading the way in robot adoption, automakers, component makers, machinery firms. you can buy a robot to be used for as little as $25,000 compared to $250,000 ten years ago. add to that new technology means they're easier to reprogram. you can teach a robot to do a new task within as little as 30 minutes. it will boost demand for others. >> you're going to see a whole lot of high end electrical and mechanical engineers that would basically service the robots to make sure they're operating well. >> they'll also be designing the robots and of course the software that helps run them. but before you get worried about
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lost jobs, keep in mind if a smaller manufacturer can buy one of these robots to help with manufacturing, they might bring production back home because overall labor costs. in turn hiring jobs or hiring workers who may have lost their jobs to low wage countries. in addition, of course the industry is hiring too. irobot is on a hiring spree. i'll have more on that story coming up on "squawk on the street." back to you. >> thank you. >> isaac has a book irobot. it's the opening of "chappie" this weekend, too, who is a robot. it's a big budget movie. >> of what? oh, a movie. >> yes. a movie. only got one star though in the post that i saw. isn't "i-robot" isaac? and they named the company after
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that. coming up our panel gives their final predictions for the numbers. plus jim paulsen gets into the mix. "squawk box" will be right back. ameriprise asked people a simple question: in retirement, will you have enough money to live life on your terms? i sure hope so. with healthcare costs, who knows. umm... everyone has retirement
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it's game time. now time to play predict the payrolls. this is your last chance for our guests to state their case on the jobs number. this is just minutes away. we're going to start. everyone's been writing down on the predict the payrolls sticks. so mark zandi, your prediction sir. >> go like this? >> yes. 220. make the case. >> the case? >> the case. >> trend growth distracting from the ups and downs. by the way adb, 210, 212. >> all right. steve? >> 230. >> 230. with a little grateful dead. zplp yeah. my model gives me 220 private sector. i make up a number for government. i added ten. my error rate has increased a lot because i missed that last
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number. >> was it massive? >> it was massive. because i was 200,000 under the 400,000 number. >> lahnee? >> i back out a little bit. >> rick? the number? >> 166,000. >> such a pessimist. okay. who do we got? >> becky. >> not a pessimist! come on. you can't leave me hanging at pessimist! maybe it'll turn out i'm the only realist. how about that? >> we will see. becky, i love you, but we've got to go to austan. >> yeah i thought i was going to be the pessimist. but i'll say 209. because i think we've still got some momentum from low productivity. but soon we'll start slowing down. >> beck y i? >> 215. i just made it up. >> joe? >> i will not do this stupid exercise. so this time i came up with -- remember that guy?
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he's always got the sign all the time. how's that? >> very lovely. >> i need a rainbow wig. >> and here i am. i'm at 210. i'm trying to play price is right rules so i can win against austan. >> i was 209. >> i thought you were 211. blew the whole thing. >> god so loved the employment report that he gave -- nice. it says that right there. >> all right. stick around everybody. when we come back, it is the february jobs report. the numbers and the analysis is next. will it sway the fed? how should investors position their portfolios and what do the numbers say about the state of the labor force? we'll break it all down. "squawk box" will be right back.
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♪ we might be less than a minute away from the february jobs report. rick santelli standing by. the rest of the panel includes steve leisman, lahnee chen austan goolsbee, mark zandi. we hear it might be late because of the weather. we'll see. futures have been down much of the session. now it's up 7, the dow is. fractionally higher on the s&p. up.
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66. and the nasdaq doing the best of those three up about almost -- not quite 5 points. that's where the 10-year is right before this comes out. 2.1% on the 10-year. are you going to have this for me leisman? >> i'll do the best we can. i heard the buzzer. >> there was the buzzer. >> but i don't have a number here yet. >> rick anyone is free to go with it at this point. >> reload, reload. >> the website is temporarily unavailable which means -- >> everybody is trying to get in. >> someone today said 166. lahnee you said 166, right? >> no i was 190. >> who said 166? >> rick. >> can we get a screen shot of this just the we're sorry, the website is currently unavailable. that's where we're at right now. >> is that right? >> some wire guy is desperately
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trying to beat the world on this. could be a woman. >> you keep pressing inter. >> labor force participation rate's out. so i'm seeing it trickle in. in little bites. and i don't know. oh, actually no i take that back. they took it down. and they put out the trade balance. trade balance. minus 41.8 billion. so deficit of 41.8 on trade. that's out on the wires. that's about as expected. that's down from 45 billion. something else is coming out here. it looks to me -- oh man. that's a biggie. looks to me like it could be 295. 295 is what i see. but, listen there's asterisks here. every service is not here yet. it's 295 on two of them. i think it would be safety for me to say that. 295,000. obviously i was the closest at 166.
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239,000 on the revision. >> rick i think somebody said 310, did they not? this is the second time somebody had this. i had 310 on mine. >> 316. >> yeah. that's the second time -- another time i did that. i did pi. >> oh, that's right. my techniques are better than any of all the stuff you guys do. the way i do it is better. >> average hourly earnings up .1%. >> economics 5.5% is the unemployment rate at this point. i'm reading through. >> this is not the way to do this, really. >> but it's not our fault. >> year over year is 2% earnings. >> all right. let me tell you, i've got the release now. among the major worker groups the unemployment for teens includesed to 17.1% in february.
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jobless rates for adult men, 5.2%. adult women, 4.9%. what are the other numbers you want out of this? the civilian labor force participation rate changed little in february and remained within the range of 62.7% to 62.9%. >> becky, i have the individual sectors here. >> okay. >> private sector up 288 which means government you can do the math was up 7,000. the goods producing sector up 29,000. manufacturing was up 8 inside that. construction up 29. very close to what adp had as well. let's see. retail up 32. that's a nice number there. let's see. i like to look at finance. up 10,000. education health services up 54,000. and leisure and hospitality up 9
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with government up 7. >> the average work week for all employees on a private nonfarm payrolls was 36.6 hours for the fifth month in a row. manufacturing work week was unchanged at 41 hours in february. average earnings rose by 3 cents to $24.78. in february. >> any revisions to previous months? >> 239. >> the change in total for december remained 239. >> yields testing year end settlement gang. this is going to be interesting. we're dabbling in 217, 275 in 30s. that's where we settled last year. several ticks below. there's your yield curve. i tell you we could talk about the data but considering how coiled up the markets are after the disappointing announcement on qe yesterday for various reasons, if we get up above settlements, it could get rather
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wild in this kind of thin liquidity of the floatable tradeable treasuries. i don't know what the panel would think about that. >> i can't wait until the government totally controls the internet the way this came out today. i think it's going to be great when they actually are -- have their -- >> don't they already? >> the server's going to be in hillary's house. >> i just want to talk about the trend here. >> then the other thing i heard from welsh is why would you have an exercise about guessing about a guess? >> right. >> that's a good one, isn't it? >> jack was the guy who said it was a conspiracy. >> that's why it's good. and it certainly wasn't. >> it was such a conspiracy. puts out the 123,000 number a month after the elections. right? that was such -- >> it was a joke, steve. you don't need to use this as your soap box. you're a joke.
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anyway, go ahead. >> whoever that guy the head of the bls is going to sue joe for defamation defamation. >> for definition of character. i resemble that remark. >> first of all, the models aren't working for anybody here mark. let's be clear about this right? we have this trend and it feels like job growth has stepped up into a place where the relationships we thought existed are maybe not good enough to predict what's happening in the market. okay? >> well, one of the key relationships that's broken down is gdp growth and jobs. and it's very, very weak. >> and allen -- alan greenspan gave u us that. and you said -- >> i also suspect gdp will be revised up. when we get all the revisions in three, five years down the road my guess is -- because i think
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we're producing a lot of stuff out there that is very difficult to pick up in relative realtime and as we get the information coming in we'll get more gdp. this will square more. >> this is a little nerdy, but all of a sudden this quarterly service index has now become the most -- one of the most important factors. march 10th we're going to get the quarterly number? >> yeah. >> i just want to bring in austan. austan was your number there? >> my number was 209. this is well better than my number. i think if this -- >> go ahead. >> if this continues, if we don't have the slowdown in jobs that i have been predicting then the fed is going to move in june. the market doesn't think they're going to move in june but at the monetary policy forum, the governors got up and said i don't know why you don't believe us. we think the economy is doing better. it's going to be june or september. that's it. >> austan wage growth --
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>> rick i'll do the same bet with you i did with leisman. hundred dollars to your favorite charity that they don't move in june. >> they won't because wage growth is dormant. >> and this is another anomaly out there. it makes sense. you hire a lot of people. over time you have to pay more for hiring those people. that does not appear to be the case. >> u be they have a lot of slack. >> you saw wage growth last month and a little bit this month over those two months we've had a very strong labor market. that continues. >> lahnee this was going to be my first data point given why the fed was not going to raise in june. >> what was it? >> this was going to be my first data point to show things were weaker than they thought and they weren't going to move in june. they're going to wait. >> you mean the jobs number being weak. guess that. >> although i did guess 316. how do you explain this lahnee? >> i'm actually with austan on this one. i do think that we could look to june. i guess the troubling or
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questionable thing which remained i guess 62.8 so 62.9 last month. 62.7 in december. if they point to anything as an excuse to hold off, that may be it. that and the relatively muted wage growth. i think it'll be interesting to see how they handle it. >> is that not a number if we should question whether this is really vibrant and if it's really percolating, the jobs market. isn't that something people are supposed to come back and say it's time for me to try again? isn't that supposed to be rising? >> yeah. but every year the participation rate is going to decline. because of the boomers. >> i know. you can explain it away. >> it's reality. the boomers are retiring. so that's weighing very heavy. here's the key thing about labor force and labor force participation. the problem is going to be a streaming lack of labor.
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there's not going to be people out there. >> i'm banking on this being the last year of the baby boom. i believe my future job security is based on the notion of servicing all of these people who will eventually have to retire and then the younger cohorts will have to have a job. so i'll never retire. 63 i think is the last year. that's my year. a million people came into the workforce in january. 178,000 left in february. >> how many? >> 178,000 was the in you remember that left in february. so it's pretty much flat right? >> so participation rates have been flat for a year. labor force growth now is 1%. that's equal to the working age population. just to do the arithmetic for you, that translates into about 125k of jobs per month. that's what we need for stable unemployment rate. at 300k we're blowing through this slack very rapidly. but there's still a lot of
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slack. >> so there are fed people out there that believe the full employment rate the rate at which unemployment starts to create inflation is quite a bit lower. and these are people on the fed. >> yeah. >> so there's a long way to go -- >> because the unemployment rate's not real. that makes perfect sense, now doesn't it? >> why is that not real? >> and it isn't an excuse. it was overlooked when it was convenient. now all of a sudden it's inconvenient and the reality is dawning. and in terms of 55-year-olds there's more of them in the workforce than we've had in many years. so it is demographics of course. but there's more to it than that. and i tell you what i don't have all the letters after my name. maybe everybody in the panel does. but when jobs keep going up but growth doesn't, i mean there is one easy way to reconcile it. whatever those jobs are, they're not up to the task to generate the income we need in the economy. >> we're creating 3 million jobs a year rick. you have to go --
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>> well mcdonald's must have bigger stores out in the east coast then! >> for the average american what matters is are we creating jobs are they good paying jobs and are they full-time jobs and they are. and it might bring down unemployment. and it is. >> okay, guys. wait a second. >> the question is are we going to get 3 million on a regular basis or was that a one-time thing because we had this weird productivity? and i think that was more of a one-time thing. and mark it sounds like you think it's more of a momentum. >> oh yeah. well we can't hit 3 million forever. we're going to hit full employment. >> that's exactly my point. >> wait a second. hold on this thought for one moment. everyone is staying with us. when we come back we'll also be adding jim paulsen. he'll join in the conversation as well. we're going to find out what some of the best in the business are taking away from these numbers after this.
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welcome back, everybody. the jobs report out just moments ago. we've been talking about what happened particularly with the unemployment rate dropping to 5.5%. the number was stronger than people had been expecting. joiningous conversation is jim paulsen from wells capital management. the rest of our jobs panel is here, jim, but let's get your thoughts on this. with unemployment at 5.5% we had austan goolsbee weighing in saying that meaning a june rate
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hike is imminent. would you agree with that? >> i lean that way. i think we've been looking a lot -- i think the two things that can trip the fed is wages and fed rate. more importantly i think we're growing job creation now year on year a little over 2% and labor falling at a pace of 1% a year or more than that. so you're looking at six months from now being with an unemployment rate with a four handle. and i think between now and then if you creep this thing towards 5%, i can't imagine a federal reserve in this country arguing that we should have a zero interest rate structure when we're sub-5% unemployment. >> wait wait wait. i think i've gotten everybody's thought on this around the table. i know steve doesn't think it's likely. mark doesn't think it's likely.
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i know rick does not. but who we haven't heard from yet is lahnee. what do you think? >> i do think we ought to look to june. i think june is likely at this point. i guess again the question comes back to labor force participation. i didn't see the six number. i haven't had a chance to look yet. but they are looking for excuses to hold off. but the excuses are getting fewer and fewer. >> becky, can i make one more point? >> go ahead. >> we seem to have so much concern in this country about the lack of wage inflation and what that applies for the plight of the laborer. but the reality underneath this is we're suffering from like in the 70s. today wages are going up at two but real wages are really growing. we might have lack of wage inflation, but real labor income is growing north of 5%.
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one of the stronger paces in decades. but we're talking about the weak labor market but it's a strong income. >> the six of you around this table are even le decided. around the entire panel. three of you say yes they're going to hike rates in june. three of you say no way. we should look at the euro at 1.08 and change. >> and have you looked at the cpi or the -- or the pce core index or either one of these? we have been below the fed's target since at least 2012. maybe longer. we're running -- what is the cpi? 1.3 now? >> less. >> it's less than that. so i'm sorry the core is. so jim, it doesn't seem to me the fed -- the fed has so much time to worry about any gathering inflation here. i think it can hold o off for quite some time here before worrying about the inflation
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problem. >> the mystery for the fed and everybody is how much slack is in the labor market. we don't really know that. we know we have a lot of part-timers who want to work time full-time. the only way we're really going to know that we're closing in on full employment is if wage growth is accelerating. so that to me means it's a necessary condition -- >> but if wage growth accelerates, if you went from 2 to 2.5 to 3 to 3.5 to 4, it still wouldn't be a big deal. >> that's correct. because we need wage growth that's consistent with stable inflation of about 3.5%. >> this is the reason we'll never have inflation in this country. if people are so concerned and hyper about any tick up in wage inflation, then we'll never get there. >> but you've seen it. we went from -- and paulsen, i'm with you. we went from people were really hyper fearful of inflation about
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three or four years ago. now we've come completely the other way with people like you saying it's never coming back again. we moved the whole gamut. i'm hearing from other people with companies and all of the companies now are finally talking about wages going up at some point in their forecast. they're making new assumptions that they weren't making last year or the year before and they point to walmart. walmart didn't do anything unless it's time you know they've dragged, kicking and screaming into this. i think you're going to be right. >> i just look at there's so much attention here on the plight of labor, how we've got to get wages up raising minimum wages, but the real is if i like at wages times hours worked deflated by the consumer price index is growing remark pli strong. the growth of labor is growing as fast in this recovery in this entire recovery as it has in any recovery almost in the
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last 40 years it's growing as fast today as it did in the late 1970s when we ladhad 7% wage gains. like we suffered from money illusion in the '070s we are suffering from reverse money illusion, we think low wage inflation means bad purchasing power. i don't think it is. >> have you heard anyone point that out? >> expectations are 2%. wage growth is 2%. on that basis, there's no real wage -- he has temporarily real wage growth as positive. >> le said it was the best since -- >> compared to -- mark. >> no wage growth. >> mark mark real wages have been rising for 20 years since the mid '90s, regularly, and up at 5.1% pace before today's announcement. since the peak the end of the last recovery in december 2007 they're up 5.1%. >> what are you using as
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inflation in that? >> what? >> what inflation rate are you using? that's what's mixing us up. inflation hasn't been as low as what you're portraying. >> well i'm using the consumer price index, that's a standard index. >> that's growing 1% wages are up 2%. i don't see the math. >> are we saying good-bye to everyone. >> i think we are saying good-bye. >> it's been lovely. >> 11%'s the -- >> the good twin and evil twin i'm not saying which is which. good to see you. >> they're both wrong. >> give my best -- as you see condi. any of those big hitters out there, say hi tell them i love stanford, think about me. up next monday on "squawk box," we are going to watch the apple watch, watching for the apple watch. mcdonald's also is going to be in the news reporting same-store
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sales and ceo of one of america's first publicly traded companies, not the original ceo, probably. dun&brad street's chief executive stops in.
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welcome back. take a look at this euro at 1.0889. again, pressure adding up after we saw a stronger than expected employment number report that came out. european currency down 16%, just over the last 6 months. additional pressure on the expectation that the stronger than expects employment numbers will force the fed to raise rates in june half of our market panel thought that was the case. you can see that playing out here in this chart as well. >> what a great trade. opportunity for an upgrade. sound good? great. because you're not you you're a whole airline... and it's not a ticket you're upgrading it's your entire operations, from domestic to international... which means you need help from a whole team of advisors. from workforce strategies to tech solutions and a thousand other things. so you call pwc. the right people to get the extraordinary done.
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♪ yep, check this out, george cramer and jerry together again. pictures from mini "seinfeld" reunion earlier. that's not the famous kramer. okay. >> not jim. >> all right. i don't know who that guy -- earlier this week, getting buzz on social networks. today, jerry seinfeld jason alexander, george can stanza
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the baby buggy fatherhood put on by seinfeld's wife jessica. >> i don't know if you saw the very sad review larry david on the other side has a play. >> bad? >> possibly the worst review i've seen in a very long time. >> have a great weekend, everybody. we'll see you back here on monday. right now it's time for "squawk on the street." ♪ good morning. welcome to "squawk on the street." i'm david faber with simon hobbs and kayla tausche, live from the new york stock exchange. carl and jim both off today. a look at futures right now. of course, you can see we are, well poised for perhaps what may be a bit of a down open there. as for crude oil, what's the story there? we like to look because, of course, it is so important to markets over the last few months. down yet again. but right around that $50 mark. ten-year that may be perhaps the story of the morning, at least it was
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